Cattle Marketing

Matt Hersom, University of Florida Extension

Culling cows from the herd is a normal part of annual ranch management. How and when cull cows are marketed represents your last opportunity to generate revenue from each cow. There is an opportunity to add value to cull cows to generate some additional revenue for a cattle enterprise. Just as there are options to be compared before marketing weaned calves, producers should weigh their options before marketing cull cows.

There are a number of reasons for a cow to be culled from the herd. A primary reason is that the cow is open (not pregnant) when the herd is pregnancy tested. Without the prospect of a calf to sell, the open cow becomes an expense. Secondary to pregnancy status is age, as older cows are less productive or have greater risk of health and structural issues. Other reasons to cull a cow include disposition, not weaning a calf, overall poor performance, poor body condition, sickness, or injury. Certainly cows with active sickness/disease or that have not yet cleared withdrawal dates for animal health products should not enter market channels. Cattle producers may have an interest in adding value to their own cull cows, or in creating another potential revenue stream, there is opportunity for improving the value of culls cows.

Adding Value to Cull Cows

Figure 1. Example of the before and after of cull cow 931. (Gainesville FL, Photo credit Matt Hersom).

Before embarking on the process of adding value to cull cows, you need to identify your goals and what resources you have available. Many cull cows are in poor body condition and will require a higher plain of nutrition to add weight. A primary consideration then for adding value to cull cows are economical feed resources. If pastures will be used to provide the base nutrition for reconditioning cows, make sure there is enough extra so that the main herd will not be impacted. Any supplemental feed-stuffs used must provide the opportunity for a low cost of gain. Often these supplemental feeds might be leftover or excess hay or feed, or a delivery of low-cost byproducts from the previous year. However, not sacrificing the performance of the primary cow herd by diverting feed resources is important. The amount of pasture and supplementary feeds necessary to achieve an acceptable level of gain should be considered before you start. You also need to estimate the number of days necessary to add value to cull cows, so a total cost can be determined.

Aside from the feeding aspect of improving cull cow value is the marketing aspect of the reconditioned cull cows. For cull cows, the concept of differentials of weight, condition, price, and overall value drives profit potential. The differential timing of cull cow purchasing and marketing and the associated prices can be large influences on the profit potential for improving cull cow value. Seasonal price differences in the cull cow market can influence profit potential. Likewise, the weight differential of purchasing light-weight cows and adding body weight is imperative. More pounds at the selling point drive the profit potential and decreases the overall cost of gain. Along with the body weight change, the differential change in perceived body condition is an important driver in cull cow value. Reconditioning of cull cows changes body composition and may move cows into improved value categories. Finally, determining the acceptable level of risk and available opportunity for profit should be evaluated. Each operator will have different comfort levels with risk, and different opportunities for profit.

Summer vs Fall Comparison

Table 1 has two examples of cull cow value improvement ventures. One initiated in the summer with six cows, the other initiated in the fall with five cows. In each case there was ample bahiagrass pasture available and available cheap by-product feed because of an existing contract. At each time cows were fed as a group in a single pasture. In-values are the price paid at the auction barn, in-weight and body condition score were determined at the farm. Data presented are the mean and range for the responses collected. All animals in each group were fed for the same number of days. In the summer group there was quite a spread in cull cow in- weight (200 lbs) and in-value (nearly $200) that existed. Likewise there was a spread in the cull cow average daily gain (1.3 lbs/day), cost of gain ($0.21/lbs), and final profit ($416.49) when the cows were marketed. In fact, in the summer group, three of the six cows resulted in an average loss of $110, whereas the other three resulted in a mean profit of $183. In contrast, the fall group was a much more uniform group in body weight, but still varied by $159 for in-value. Final body weight differed by only 50 lbs, but out-value differed by $415, and profit differed by $400. Compared to the summer group, the fall group did not gain as well, had higher cost of gain, but reconditioning resulted in all cows making a profit. Figure 1 presents a before and after example of a fall cull cow venture. Cow 931 had an in-weight of 985 lbs, body condition score of 2.2, and in-value of $434. After 84 days, cow 931 had an out-weight of 1,140, body condition score of 4.3, and out-value of $655, resulting in a profit of $127.

Summary

Improving the value of cull cows offers income opportunity for cattle producers. Keys to success include having cheap feed resources available in the form of un-utilized pasture or forage and supplemental feed-stuffs at low or no-cost. Low-value cows can be turned into a value-added product by improving the carcass weight and condition of the cow to place into a different carcass quality category. Realize that some cows will have a ceiling of value and not every cow will make a profit. Cow performance and market timing affect a cow’s value ceiling. So each producer must evaluate the risk associated with flipping cows, the added costs and most importantly, the opportunity for profit.

Source: Ohio Beef Cattle Letter

By Jason Bradley, Agricultural Economics Consultant

When it comes to getting replacement females for your cattle herd, multiple options are available. One would be to use your own cow herd and keep the heifers you need. Or you could outsource and purchase virgin heifers from a different operation and breed them to the bull(s) of your choice. Another option is to buy heifers bred to a bull that would roll straight into your program.

Which one is the best? Like so many things in agriculture, the method that works for one operation may not be the best option for another. That’s why it’s so important to know what the costs are for a particular method while understanding what benefits you’ll get in return.

Pros and Cons

The pros and cons of any method should be considered before making a decision. With home-raised replacements, you should know exactly what you’re getting. You’ll also be able to sell any extra bred heifers at a higher price than feeder heifers that are not bred. The downside is it requires a much higher level of management in order to have a well-functioning breeding program, which means you need to take into account the costs and timelines for general management of your operation. It also means you’re going to have an animal that’s utilizing the available forage while not producing a calf, and you’ll need a plan to prevent inbreeding.

On the other hand, if you purchase your replacements, there will not be any missed animal production because those heifers will be calving that year. This option also allows for new genetics to be brought into the herd. However, there’s not always a guarantee of what kind of calf you will get if you purchase bred heifers. Unfortunately, with this option you cannot guarantee the genetics of the calf that will come from the purchased bred heifer. In order to purchase replacements that increase your chances of getting what you want, you will face a higher purchase price.

What’s Feasible

Before making your decision, take a step back and decide what is feasible from your operational standpoint and management abilities. Are you able to spend more time developing the replacement type you want or would your time be better spent managing purchased replacements that don’t require that commitment or resources? The options outlined here are just some of the many ways to obtain replacement heifers for your herd.

Source: Noble Research Institute

Pros and Cons

What’s Feasible

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